A decrease in aggregate demand causes a decrease in ________ only in the short run, but causes a decrease in ________ in both the short run and the long run
A) the price level; real GDP B) the price level; the price level
C) real GDP; real GDP D) real GDP; the price level
D
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Labor unions support the minimum wage because
A) the increased unemployment is good for labor. B) the value associated with the deadweight loss goes to labor unions. C) labor unions prefer to operate in black markets. D) it puts upward pressure on all wages. E) union members are usually paid the minimum wage.
If you were a Keynesian economist, you would believe that the economy
a. will always move toward full-employment real GDP b. has a tendency to generate inflation regardless of whether it's at full employment real GDP or not c. will decrease unemployment by lowering wage rates until the labor market is in equilibrium d. is driven by the supply-side of the market e. may be in equilibrium at less than full employment